With Icesave thawed, what next?

Sunday, 7th December 2008 20:06 - by Resident IFA

A while back, I penned an article admitting to the heinous crime of having money in Icesave, the failed Icelandic bank. This act of folly aside, my interest was then in how long the process would take to return my money, and whether their tax-free Individual Savings Account (ISA) status could be maintained upon re-investment. The good news for me, and the thousands of fellow Icesave savers, was that the process from the failure of the bank to having possession of my monies once again was approximately two months from start to finish. At this point, I must doff my imaginary cap to the Financial Services Compensation Scheme (FSCS). The timeliness and clarity of communication was excellent, allied to the common-sense method of returning the monies to the account nominated when originally applying to Icesave. Working on the basis that all accounts were set up online, this (mainly) internet approach should have suited most account holders. Back to my second point of interest in the first paragraph as to whether the ISA status would be upheld, the pleasing answer is ‘Yes’. I await my certificate in the post to confirm this, being required to produce this when I place the monies with another savings institution. I chose Principality Building Society as my next port of call as they had, at that time, the best variable rate, not wishing to tie my monies up for a period of time regardless of the interest rate inducement. This is not any form of advice…I simply looked at some ‘Best buy’ tables! The burning question for me now is how much lower can interest rates go before the Bank of England feels enough has been done to stimulate the economy? I believe Principality has been consistently competitive on the interest rates they have given over the last few years. Let’s hope they continue to be so. So long as I can achieve an interest rate similar to that I am paying on my mortgage and of price inflation, I will be happy. I realise this could be fairly unlikely and perhaps a forlorn hope. This leads me to wish myself (and all other savers) good luck! Until next time…